Israeli officials were upbeat and optimistic today that a framework for resumed peace negotiations between Israel and the Palestinians would be announced "between Rosh Hashana and Yom Kippur," almost certainly at the UN General Assembly session in New York.

Speculation on a positive outcome to the ongoing talks between Israeli Prime Minister Binyamin Netanyahu and the American special envoy in London, George Mitchell, rose as the four-hour discussions concluded.

Mr Netanyahu is flying to see the German prime minister, Angela Merkel, in Berlin later today; Germany has apparently offered to host a future peace conference.

Mark Regev, the prime minister's spokesman, emphasised that the involvement of the Arab world was crucial to the success of any peace settlement. The Saudi peace plan, he said, was "significant as a basis for dialogue," though Israel rejected it as a dictate of a future settlement. "The Arab world has an important role to play," Mr Regev said. For any peace process to be successful, the Arab states had to be part of it.

But Mr Regev said that whatever would be announced by the Obama administration pertained only to discussions between Israel and the Palestinians. At present there are no plans on the table for renewed negotiations between Israel and Syria or Israel and Lebanon.

The major lever in the US-Israel discussions has been the reaction to Iran. "We would argue that now is the time for effective measures against Iran," Mr Regev said, adding that international pressure on the Iranian regime should be both political and economic.

Both sides in the peace process, said Mr Regev, "had to learn from previous mistakes in peace negotiations." Peace talks had to be both "bottom down" in respect of involvement from the international community, and "top up" in respect of the improvement in the day-to-day lives of the Palestinians. The three main tracks of the negotiations would focus on improvements "politically, economically, and in terms of security."

Mr Regev was insistent that neither side should bring pre-judgement to the negotiating table. And he stressed that Israel's position on the settlements was that these were "a final session issue which will be negotiated with the Palestians. We have said that there will be no new settlement building, no expropriation of land for existing settlements, but that normal life should be allowed to continue inside the existing settlements."